Quarantine Settlements
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Babe Ruth’s lifetime batting average was .342. Studies in states with a history of workers’ compensation mediation suggest your success rate with it is likely to be a whole lot better.
In Florida, parties must mediate workers’ compensation claims within 130 days of the filing of a petition for benefits. Results for the fiscal year ended June 30, 2013, showed a 74% success rate, defined as partial or complete resolution of the issues.
The Minnesota Department of Labor and Industry reported that the state’s mediation resolution success rate between June 2007 and September 2008 was never less than 60%. The success rate was 100% in four of those months.
The Maryland Judiciary’s Mediation and Conflict Resolution Office conducted a study where half of Baltimore’s workers’ compensation filings were referred to mediation. The 2002 report details the results. Measured at various points in the litigation process, the mediated cases were consistently found to conclude more quickly and with less discovery than the control group. For example, 83% of cases in the workers’ compensation mediation group were disposed of before their scheduled trial date, compared with 70% in the control group.
In 1992, the Dallas Mediation Project reviewed 981 mediated cases. Workers’ compensation, contract disputes and collection cases showed the highest level of resolution—87% of these workers’ compensation cases settled through mediation. Motor vehicle claims settled 85% of the time, and other personal injury claims settled 77% of the time.
Don’t be afraid to step up to the mediation plate. You might hit a home run.
Most of us have seen, and maybe used, the acronym FOMO. It means Fear of Missing Out. FOMO is the fear of making the wrong decision about how to spend your time, particularly after you’ve seen internet stories about others doing better.
Negotiation FOBO
The related condition in negotiation is FOBO, Fear Of Better Options. Fear that there may be a better option prevents negotiators from choosing any option. Seeing reports of great results in other cases, unlikely to be identical, contributes to the situation.
Some people are “maximizers”; they think they must have the perfect resolution. So they need to consider every single option. The trouble is, too many options leads to indecision. Maximizers include the attorneys who want to pursue every avenue of inquiry regardless of the expense in relation to the likely effect on evaluation of the claim.
Happier, more successful people are “satisficers”; they know how to recognize an acceptable deal and move on. Satificers aren’t pushovers. They do their homework. In mediation, they’re the people who have evaluated the claim based on historic data, expert reports, and their own experience. They present cogent, coherent arguments in their mediation brief. They have considered the downside of walking away from a deal though they might consider it barely acceptable.
To avoid FOBO, negotiators need to prioritize their needs and wants. For most mediation participants, the highest priority is closing the claim with an acceptable outcome. Continuing to litigate means months or years of additional expense and stress. Well-prepared negotiators know the status of the case today and realize that things could get worse in the future.
The claim was decades old; indemnity was supposedly fully paid. The carrier hadn’t paid a medical bill in years. The applicant had dismissed her attorney, but continued to pursue the claim.
The carrier wanted the claim off the books, so they called me. Without prompting, the adjuster disclosed his authority limit to me in an email.
The applicant, the carrier’s hearing rep, and I met for mediation.
While there was no question the applicant was disabled, the dispute was whether the disability was industrial. Thankfully, the applicant had a very good alternate form of medical insurance which had been providing and continued to provide full coverage.
I spent time with the parties separately, allowing each of them to vent about how they had been taken advantage of by the other. Issues were raised, demands and offers exchanged. While remaining neutral, I empathized with both parties, discussing pros and cons. Finally, the hearing rep made what he said was an offer of his full authority. I showed him my print-out of the email which showed authority for an additional $15,000.
He stared at me. “I have to make a call.”
“Let’s make it together,” I said.
We got on the phone to the adjuster who said the hearing rep was correct. “Mike” (not the real name), I said, “Are you able to take a look at your email to me of [the email date]?”
“Yes, I see it.”
“That says your authority is $15,000 more.”
“Oh, I didn’t have that authority. I never had that authority.”
I did NOT say, “Then why did you tell me that’s what you had?”
Instead, I went to the room where the applicant was waiting and put the hearing rep’s offer on the table.
“I have to call my spouse.” I left the room to give her some privacy.
After a little while, the applicant told me her spouse said the offer was an absolute non-starter.
The hearing rep stated he had to leave for another commitment, and the mediation adjourned without resolution.
A few days later, the applicant called me to ask if the offer was still open. I said I would check.
The case settled by Compromise & Release for the amount of the hearing rep’s offer.
The Lesson
Parties sometimes need time to process everything that happened at mediation. They may have learned about new issues or gained new insights about the basis for the opponent’s position. People often have a negative kneejerk reaction to a demand or offer. After some time to cool down, they may be able to understand a different point of view, even if they don’t agree with it.
Think about why this case settled. What did the applicant gain by being able to talk about the claim with the mediator? What do you think happened between her and her spouse once she got home? What can you conclude about pre-mediation communication between the adjuster and the hearing rep, between the adjuster and the applicant?
How important is it to have everyone who will participate in making the settlement decision attend the mediation?
THINGS ARE GOING GREAT – LET’S KEEP FIGHTING
You could pay $30,000 for a day with a retired state Supreme Court Justice. Or you could pay about a tenth of that amount for an effective mediator. When you’re ready to choose a mediator, check out the person’s bio (resume, CV) and request a copy of the fee schedule. A few mediators post their fees online, but usually you need to request a current fee schedule.
Who Pays?
In civil cases, the fee is typically split among the parties, though sometimes one side agrees to be the sole payer. In a typical workers compensation mediation involving only the Applicant and one Employer, the Employer pays the cost. If there are multiple parties or issues, such as a serious and willful claim or a third party claim for the same injury, the parties decide how the cost will be divided.
Holding Your Place
Some mediators, including WCMediator.com, charge an administrative fee which protects your choice of date. This fee covers all pre-mediation communications to set up the meeting. Payment confirms the parties are going forward. Some mediators charge as much as $1,000 for a cancellation within seven days of the reserved date.
Special Arrangements
Carve-outs are alternative workers’ compensation programs between employers and unions. Required mediation can be a feature of these programs. There is no cost to the injured worker to participate.
When a judge orders parties to mediate, they often benefit from a reduced-fee arrangement. Sometimes a court will provide free mediation to parties in the courthouse. Outside the courthouse, mediators on the court’s approved panel agree to abide by a fee schedule. This may get you a limited number of hours at no cost or at a reduced cost. Often when such a mediation is clearly progressing towards resolution and time runs out, parties choose to continue mediating at the full-fee rate.
Features of a flat fee include predictability for the parties and payment up front to the mediator. Using an hourly fee structure assures you won’t pay for more time than you use. Workers compensation mediations are usually complex and take about five hours.
Bottom Line
At the end of the day, the bottom line may be about the same. Under either arrangement, most mediators do a lot of work without compensation, such as communicating with the parties in advance of the mediation. Additionally, if the case does not settle at mediation, mediators typically continue working with the parties by phone to reach resolution without additional charge. Unless you have submitted a human-size set of documents for review (not recommended), mediator preparation time is also free. If you are unsure, ask what the fee does and does not include and what services do not incur a charge.
If you don’t like the billing method on the mediator’s fee schedule, you can request an alternate quote that fits your comfort zone.
The California Supreme Court has approved new rules of professional conduct for attorneys licensed in California which go into effect November 1, 2018. These rules generally expand the existing settlement ethics rules. Violation of the rules can lead to a range of disciplinary actions, including disbarment. Here are the ones which affect people trying to settle a case.
Client Communication
Prior Rule 3-500 in a single sentence required lawyers to keep clients reasonably informed about significant developments. New Rule 1.4 is more detailed. Now there’s a two-way street: the lawyer must reasonably consult with the client about how to achieve the client’s goals. What’s more, the lawyer must also inform the client about what the lawyer cannot legally or ethically do even if it’s what the client expects.
Prior Rule 3-510 required lawyers to promptly communicate the specifics of a written settlement offer. A California lawyer need only pass along a spoken settlement offer if the lawyer deems the offer significant. New Rule 1.4.1 preserves this distinction.
In evaluating settlement offers or making other decisions about the representation, the Comment to new Rule 2.1 clarifies that a lawyer can initiate advice to a client on relevant, non-legal issues, such as moral, economic, social and political factors.
Diligence
Prior Rule 3-110 defined “competence” as including diligence. Now a separate Rule 1.3 prohibits a lawyer from “intentionally, repeatedly, recklessly or with gross negligence” failing to act with reasonable diligence.
New Rule 3.2 says “a lawyer shall not use means that have no substantial purpose other than to delay or prolong the proceeding or to cause needless expense.” Now an ethical rule may apply to needless court appearances and continuances and improperly postponed treatment.
Here’s an oxymoron for you: the humble litigator. Like jumbo shrimp and military intelligence, it may seem ridiculous to pair humility with any litigator. But for anyone trying to settle a claim, a little humility can help get you to the finish line.
Most of the time that dispute will eventually settle without court intervention. The parties want to resolve the issue with the smallest expenditure of time and money. Incivility, bias, prejudice and anger are inconsistent with humility and get in the way of settlement.
Acting with humility does not admit fault. The most successful litigators are courteous and respectful.
I’m The One Who’s Right
Of course you are.
Then why is the other side fighting so hard to say the opposite? Of course they’re completely wrong, but maybe, just maybe, you could pretend they have a reasonable point of view. Or—here’s a shocking concept—try to see their point of view.
Students learning to debate (or get through law school) may be asked to argue a position with which they disagree. While preparing for mediation, try to outline the other side’s position and think about all the reasons supporting that position. This is an excellent way to marshal your own arguments. It is also an exercise in empathy.
You Want Me To Do What??
Think about forgiveness. When you feel wronged, your desire for vindication may make negotiation difficult. Forgiveness must be internal and not necessarily verbalized.
Forgiveness is about moving on, doing the best thing for you and those you represent, not for the benefit of the offender. Forgiveness keeps you in control of your emotions rather than surrendering control to the volatility of others. Forgiveness does not validate the other side’s behavior or minimize the damage it has caused. It doesn’t mean you were not wronged or that the parties will have a good future relationship.
Conversely, a well-phrased apology has helped settle many a case. For example, I watched one litigator, without any prompting and without admitting fault, express sorrow that the injured worker had experienced a lengthy delay in getting treatment. That may not be right for your case; for his, it was. Don’t forget that everything said in mediation is confidential and cannot be used for evidence in any forum.
Good People, Strong Emotions
You’re a good person, right? Yet, difficult situations can spark rage and other extreme emotions in the best of people who then behave without humility.
In mediation you can state your position in the strongest terms in a private session with the mediator. The mediator can then skillfully communicate those emotions to move parties to settlement.
A bit of humility can improve your effectiveness in formulating and reacting to those communications.
Almost all of my workers compensation mediations end with agreement to a Compromise and Release. Parties often bring a partially completed Compromise & Release form, DWC-CA form 10214(c), to the mediation. That’s great. But when considerations prevent execution of a final agreement at the mediation, a Memorandum of Understanding, known as an M.O.U., can be invaluable.
What Is It
After working hard to come to terms, you don’t want to let the passage of time blur people’s memories or minimize their commitment. Participants should not leave the mediation without a record of their agreements.
A Memorandum of Understanding memorializes the skeleton terms agreed upon at the mediation. Parties sign off at the mediation. The M.O.U. might specify a timeline or conditions.
Getting to MOU
Mediation allows parties to address issues outside the jurisdiction and procedures of the WCAB and to fashion creative solutions.
If you have despaired of closing that troublesome, decades-old claim, turn to mediation.
Take the bull by the horns, and the result may well be an M.O.U.
In contrast, mediation resulted in resolution 100% of the time in the studied cases. Yet, lawyers used mediation in only 2% of the cases.
Lack of Visual Information
You can’t share documents or other visuals over the phone. Even if all participants to the call are supposed to have the documents in their possession, you can’t be positive they are actually looking at it, even if they say they are, or if it’s the right one.
Getting Negotiators to Pay Attention
Listening is hard work. When negotiators use the phone, they may not be focused. There could be active interference, e.g., flashing lights and text messages on the phone, incoming emails, other notifications from multiple devices, or co-workers coming by. Even without those distractions, people’s attention may drift.
Technology Can Get In the Way
What about using Facetime, WhatsApp, Skype or another video call utility? Theoretically, this could overcome some of the deficits of voice-only negotiation. On the other hand, have you seen the hilarious Tripp & Tyler video about video conference calls? Even when the technology is working perfectly, body language can be difficult to interpret or convey through video.
Video conferencing might be helpful during mediation if, for example, the adjuster or injured worker is in another state and unable to travel to the mediation, assuming the principal negotiators are physically present.
What About Meeting At The Board?
Meeting at the board could resolve some of these issues if the parties come with adequate authority, fully prepared, with all relevant information available to them, and with no time pressures.
How often does that happen?